New House bill would designate 1,000 hospitals as ‘essential health systems’
The facilities that meet the ‘essential’ definition provide five times the uncompensated care to Medicaid, low-income Medicare or uninsured patients than other hospitals, according to lawmakers.
More than 1,000 hospitals would be designated as “essential health systems” under a bipartisan bill introduced in the U.S. House. The proposed legislation, if enacted, would make it easier for hospitals in underserved communities to receive funding, grants and support from the federal government.
“We must ensure hospitals in our rural and underserved communities have the resources they need to provide high-quality care,” said Rep. David Valadao, R-Calif., who cosponsored the bill with Rep. Lori Trahan, D-Mass. “The Reinforcing Essential Health Systems for Communities Act will clearly identify the hospitals that serve our most vulnerable communities, allowing critical federal resources to be more easily directed toward them.”
Hospitals would qualify as essential health systems if they meet one of three criteria:
- Disproportionate patient percentage, which captures a hospital’s portion of Medicaid and low-income Medicare patients;
- Deemed disproportionate share hospital status, which highlights a commitment to serving a high percentage of Medicaid and low-income patients and accounts for differences in Medicaid among states; or
- Medicare uncompensated care payment factor, which identifies the relative amount of uncompensated care provided and can help capture the costs of care delivered to uninsured individuals.
The sponsors noted that facilities that meet the definition provide, on average, five times the uncompensated care to Medicaid, low-income Medicare or uninsured patients as other hospitals. However, safety-net facilities are “historically underfunded and often limited in their ability to maintain and expand the critical health services they offer to patients,” Trahan said.
Several hospital industry groups expressed support for the bill
“We applaud these lawmakers for their leadership to support the safety net by giving policymakers a way to focus federal resources where they’re needed most, on the hospitals that care for disadvantaged people and communities,” said Dr. Bruce Siegel, president and CEO of America’s Essential Hospitals.
An essential health system definition would follow similar designations for other classes of providers, such as critical access hospitals and sole community hospitals. In each case, policymakers recognized the need to formally codify defining criteria and policy incentives to stabilize and protect these providers within the larger health-care ecosystem. However, hospitals with a safety net mission lack a similar federal designation.
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“We saw during the early days of the pandemic challenges identifying and targeting relief to hospitals serving communities hardest hit by the virus,” Siegel said. “This designation would give policymakers a tool for the next public health emergency to ensure support quickly goes where it can do the greatest good.”